The UK retail industry has shed 225,000 jobs over the past five years, according to the Office for National Statistics (ONS).
Data for September 2024 shows 2.81 million retail jobs, indicating ongoing challenges and structural changes in the sector.
Sector Transformation and Employment Shifts
The British Retail Consortium (BRC) pointed to structural shifts within the retail industry as a significant factor in the job reductions. Helen Dickinson, CEO of the BRC, stated:
“Despite a further fall in the number of retail jobs, the industry remains the largest private sector employer providing approximately 2.9 million jobs in the UK, with another 2.7 million in the supply chain.
“The current fall is partially explained by ongoing transformation in the industry, from increased investment in automation and higher productivity, to a shift to outsourcing of warehousing and logistics that are not all captured by the ONS retail figures.”
The transition towards automation and operational efficiency reflects wider changes in retail. Dickinson noted that retailers are responding by increasing investment in automation and productivity improvements.
Rising Costs of Employment
Rising employment costs are placing additional pressure on the sector, with pay growth in retail reaching 8.5% in 2024 and climbing by over 25% since 2021. Future increases are expected to exacerbate challenges.
“The October Budget increases the National Living Wage by a further 6.7%, adding over £2.7 billion to retailer wage bills from April 2025, while changes to rate and threshold for employer NI contributions will cost the industry over £2.3 billion,” said Dickinson. “This could hasten the reduction in retail jobs and particularly the recruitment of part-time roles, which have been falling in recent years.”
Dickinson added: “It is inevitable the Budget will also put pressure on jobs and hours in the coming year, potentially affecting communities all over the UK that rely on retail as a vital provider of entry level, local jobs.”
Regional Impact and Challenges
In Northern Ireland, the retail sector has experienced a loss of 7,000 jobs over five years, despite overall employment growth in the region. Neil Johnston, Director of the Northern Ireland Retail Consortium, said:
“139,000 people work in retail in Northern Ireland, according to the latest ONS jobs figures. However, this is 7000 less than five years ago. Given the context that there are record numbers employed overall in Northern Ireland, it begs the question: why is the retail environment so challenging?
“The numbers employed in Northern Ireland overall are up 9,000 in the past year, but in retail in the past year numbers have flatlined. Retail is extremely challenging at present – shopping trends are changing, footfall is continuing to fall, and sales are at best flat. Profit margins are also notoriously small.
“Recent years have seen additional supply chain and statutory costs imposed on all employers including retailers, but the environment in retail has been so challenging that this has led to this marked decline in staff numbers.
“Retailing remains a significant employer – employing almost one in six people in Northern Ireland with many more in the supply chain. It is also an important part of the local economy, however, the proposed increases in employers’ National Insurance and expensive regulations for tackling waste seem certain to guarantee that life will remain tough for retailers in 2025.”
Implications for the Jewellery Industry
For jewellers, these trends highlight a need to adapt to ongoing changes in the retail environment. The sector’s focus on automation and efficiency may open opportunities to leverage technology for operational improvements. However, rising wage costs and reductions in part-time employment could impact smaller jewellery businesses reliant on flexible staffing.
Shifting customer behaviour and declining footfall also underline the importance of maintaining a strong focus on customer experience and exploring innovative retail strategies. In this evolving landscape, jewellers should assess workforce needs and remain alert to regulatory changes affecting employment costs.
